Education Minister Chris Hipkins today announced proposals that included creating a "New Zealand Institute of Skills and Technology" as early as the start of next year, and removing responsibility for work-based training from the 11 industry training organisations.

The president of the Tertiary Education Union, Michael Gilchrist, said it supported the government's plan because its members wanted more cooperation between institutions and less competition.

"We have been asking for a nationally-coordinated system. The current model of competing autonomous institutions who are competing for funding, and that of course translates into competing for students and competing for high-value courses where they can make profits, that system isn't working," he said.

Mr Gilchrist said the union was worried about job cuts but hoped they would be off-set by increasing enrolments.

"Certainly we are concerned about our members' jobs but looking at the big picture, the context of this proposal is positive," Mr Gilchrist said.

Industry Training Federation chief executive Josh Williams said the plan would dismantle the industry-led training and apprenticeship system and the federation was not convinced the government's proposals would improve on that system.

"It feels certainly like we've been swept up as part of the process to stabilise the polytechnics," he said.

"Our part of the system was not broken, it is actually performing well, it is getting good results, it is vastly more cost-efficient to government than provider-based training."

Mr Williams said industry was best placed to decide the training arrangements that met its needs, including commissioning training providers to deliver courses and programmes.

"We currently have 145,000 people per year in workplace training and apprenticeships training in 25,000 firms supported by the eleven ITOs. This is the largest form of post-school education. We do this with just six percent of government funding for tertiary education. For every $1 million invested in the tertiary sector, ITO-arranged training qualifies 300 skilled workers. By comparison the polytechnics currently qualify 50," he said.

The chief executive of the largest ITO, the Skills Organisation, Garry Fissenden said the plan would disadvantage thousands of apprentices and students.

Mr Fissenden said the proposal would undermine industry training organisations, reduce employers' involvement in their staff's learning, and increase risk to business.